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July 06, 2015 TECHNO FUNDA REPORT ON TECHNO FUNDA REPORT ON CRUDE OIL CRUDE OIL Prices may move lower Prices may move lower

Techno Funda report on Crude Oil - SMC Global: Online ... · These long term fundamental calls are for duration of three to four weeks time frame and do not confuse these with

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Page 1: Techno Funda report on Crude Oil - SMC Global: Online ... · These long term fundamental calls are for duration of three to four weeks time frame and do not confuse these with

July 06, 2015

TECHNO FUNDA REPORT ONTECHNO FUNDA REPORT ON

CRUDE OILCRUDE OILPrices may move lowerPrices may move lower

Page 2: Techno Funda report on Crude Oil - SMC Global: Online ... · These long term fundamental calls are for duration of three to four weeks time frame and do not confuse these with

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Note:

�These long term fundamental calls are for duration of three to four weeks time frame and do not confuse these with intraday calls.

�It is assumed that investor takes position in two lots and square off position in one lot on partial profit booking and trail stop loss to buying/selling price for second lot.

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MCX CRUDE OIL (AUG) DAILY CHART

RecommendationInvestors can take fundamental sell position in Crude oil (Aug) at current prices for the target of 3200 with stop loss of 3670.

Source: Reuters

NYMEX CRUDE OIL DAILY CHART (AUG)

Source: Reuters

Page 3: Techno Funda report on Crude Oil - SMC Global: Online ... · These long term fundamental calls are for duration of three to four weeks time frame and do not confuse these with

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Bullish factors

Recovery in Greenback

Dollar index can witness some recovery at current levels as its prices can show recovery towards 98 levels in

near term .Any recovery in greenback in bearish for Crude oil.

Increased US production

U.S. crude oil production is projected to increase from an average of 8.7 million b/d in 2014 to 9.4 million

b/d in 2015 and then decline to 9.3 million b/d in 2016. The forecast is 0.2 million b/d and 0.1 million b/d

higher for 2015 and 2016, respectively. The increase in the crude oil production forecast reflects upward

revisions to estimated production in the first quarter of 2015.

EIA estimates that non-OPEC production grew by 2.3 million b/d in 2014, mainly as a result of output

growth in the United States. EIA expects non-OPEC production to grow by 1.3 million b/d in 2015 and by

0.2 million b/d in 2016. Forecast non-OPEC production growth was revised upward from last month's

outlook by an average of 0.5 million b/d in 2015, to account for historical revisions to first quarter U.S.

production and increases to forecast Canadian production.

Increased OPEC production

OPEC's output expanded last month to the highest level since August 2012 as Iraq pumps at a record pace.

Greece debt concerns and falling China stock markets to keep prices under pressure Oil prices fell sharply

on Monday after Greece rejected bailout terms and as China rolled out emergency measures to prevent a

full-blown stock market crash, adding to worries about poor demand growth. The result of the Greek

referendum put in doubt its membership in the single currency, pulling down the euro on today against the

dollar. Uncertainty over Greece is bearish for oil. It adds an extra negative factor on top of the turmoil in

Chinese financial markets.

Increase in US drilling rigs

US drilling increased for the first time after 29 weeks of declines, the strongest sign yet those higher crude

prices are coaxing producers back to the well pad. Baker Hughes recently reported that the number of

active oil drilling rigs saw a weekly climb of 12 to 640 as of July 2. That marked the first weekly increase for

oil rigs in 30 weeks. Drillers in the U.S., the world's biggest oil consumer, have idled more than half the

nation's rigs since December, said Baker Hughes.

Russia increased crude oil production

Production in Russia and the Organization of the Petroleum Exporting Countries (OPEC) is also at or near

records.

Expectation of Nuclear deal between Iran and Global powers

Putting further pressure on oil markets is a possible nuclear deal between global powers and Iran, which

could add more oil to oversupplied markets if sanctions are eased. There is expectation that deal is likely

before July 9. Western officials also reiterated the deadline won't be extended again, and significant

progress has been made recently.

Page 4: Techno Funda report on Crude Oil - SMC Global: Online ... · These long term fundamental calls are for duration of three to four weeks time frame and do not confuse these with

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Sandeep Joon Sr. Research Analyst (Metals & Energy)

Boardline : 011-30111000 Extn: 683 [email protected]

SMC Global Securities Limited is proposing, subject to receipt of requisite approvals, market conditions and other considerations, a further public offering of its equity shares and has filed the Draft Red Herring Prospectus with the Securities and Exchange Board of India (“SEBI”) and the Stock Exchanges. The Draft Red Herring Prospectus is available on the website of SEBI at www.sebi.gov.in and on the websites of the Book Running Lead Manager i.e., ICICI Securities Limited at www.icicisecurities.com and the Co- Book Running Lead Manager i.e., Elara Capital (India) Private Limited at www.elaracapital.com . Investors should note that investment in equity shares involves a high degree of risk and for details relating to the same, please see the section titled “Risk Factors” of the aforementioned offer document.

Disclaimer:

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